Parallels

4:45 pm

Thu June 27, 2013

In Symbolic Move, U.S. Cuts Trade Privileges For Bangladesh

Garment factory workers come out from a building during a lunch break in Dhaka, Bangladesh, in June. Many Bangladeshi garment factories are considered to be poorly constructed.

A.M. AhadAP

The U.S. suspended some trade benefits to Bangladesh on Thursday, citing unsafe working conditions. But in the near term it appears unlikely to have a major impact on the country's crucial garment industry.

Here's why: Bangladesh was suspended from the Generalized System of Preferences (GSP) program, so U.S. duties will rise on a range of items from tobacco to plastic. But this program doesn't cover garments — Bangladesh's main export to America.

Less than 1 percent of Bangladesh's nearly $5 billion in exports to the U.S. are covered by the GSP, according to The Associated Press.

However, the Obama administration's decision could have two consequences.

As Reuters notes: "Obama's decision would be a repudiation of working conditions in Bangladesh following the collapse of the Rana Plaza garment factory building in April that killed 1,129 people and the Tazreen factory fire in November that killed 112. It also could influence the European Union's decision whether to suspend trade benefits for Bangladesh, which would have far more impact since Bangladesh's clothing and textiles exports receive duty-free treatment there."

The AP reports that congressional leaders have pushed the Bangladeshi government to improve worker safety in the country.